The decision will allow private companies and individuals to import construction materials that were previously restricted exclusively to international aid groups under the terms of Israel's blockade.
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"From Sunday, up to 20 trucks will bring in gravel for the commercial sector daily, except on Friday and Saturday... through the Kerem Shalom crossing in south-east Gaza," Palestinian official Raed Fattuh told AFP.
"This is the first time Israel will allow the import of gravel for the private sector since the blockade began in mid-2007."
Israel has restricted the import of goods into Gaza since 2006, when Palestinian terrorists captured an Israeli soldier in a cross border raid.
The blockade was tightened a year later after Hamas seized Gaza from its Fatah rivals in fighting that erupted after the Islamist group won legislative elections.
Guy Inbar, a spokesman for the Israeli Defense Ministry body that coordinates with the Palestinians, confirmed the new policy, saying the deal would also allow the import of heavy construction vehicles, including bulldozers.
"It's the first time since 2007. It's part of the dialogue, the conversation that we have with the Egyptian side and because of the calm," he said.
"If the calm will continue, then more eases will go through. We're also working on improving the electricity system in the north of Gaza in order to promote and to improve the electricity in that area," he added.